2016 is only 20 days young and dealers and yet dealers are already planning for expenses and allocating resources for the rest of year. As a major facilitator of sales and business success and one of a dealer’s major expenses, dealership technology has always been a priority in budgeting. Here are 5 technology projects dealers will be considering in 2016.
Dealership Management System (DMS)
It is the same old story: the DMS represents one of highest cost objects in a dealership, but it is also the center of a dealer’s entire retail management platform. It’s impossible to operate without it. 2015 was a great year for dealers and improvements in DMS, as many new products came out and the competition among the vendors increased dramatically. CDK Global had its first year as an independent entity after the spin-off from ADP in 2014, and attracted acquisition interest from investment groups (primarily private equity, hedge funds). R&R pushed forward on RFID, DocuPad, and the accessory solution AOA. Dealertrack got acquired by Cox Automotive integrating systems from Dealer.com, ASR Pro, Xtime, VinSolutions, VAuto, AIS Rebates, Kelly Blue Book, Autotrader, Homenet, and others (all the same company now). Automate updated its system introducing a new payroll package and piloting its new multi-company accounting software. Autosoft introduced the all new cloud-based Flex DMS, and improved third party integration. Dominion had its first DMX system installation – based on a Microsoft Dynamics solution. DealerBuilt’s LightYear system drew attention not just for the accounting module, but also for its refreshingly modern architecture. And much more…
The New Year is always a good occasion to rethink a dealer’s DMS strategy. Start with these steps:
- Review your monthly recurring DMS costs and the development over the last years. How much did your monthlies go up? If your Controller is busy with finalizing 2015, just send us your bills and we will do a full analysis for you for free.
- Check your maintenance and rental fees on DMS equipment (e.g. laser printers, Impact and line printers, network equipment, scanning equipment, bar code readers, DL scanners). Is it time to replace some of the gear or do you want to cancel maintenance?
- Investigate variable charges for instance for data cleansing, click charges, credit pulls. The per-unit fee looks always small, but the total monthly us usually high. Maybe you need to re-negotiate?
- Analyze the utilization of all existing products. DMS vendors can provide you with reports showing you logins and activities for all solutions you signed up for. Don’t pay for something you don’t use.
- Request a contractual obligations report from your DMS vendor. This will include your maintenance service agreement and any lease agreements. Rarely do all services from the same DMS vendor expire at the same time. If you have staggered agreements, you will have to pay a buyout (or get some professional help negotiating) if you want to switch systems. Call us if you need a template to send to your vendor.
Customer Relationship Management (CRM) and Internet Lead Management (ILM) Systems
CRM/ILMs are customer-facing and therefore sales-critical applications. These systems have been dragged into the spotlight not just from dealers, but especially from Original Equipment Manufacturers (OEM). FordDirect recently announced Ford dealers can sign up for a FordDirect CRM delivered by Elead1One. Other OEMs might follow in 2016. In general, Front End is one of most innovative fields with plenty of available CRM features (e.g. Desking, Equity mining, texting, email campaign management, data cleansing, mobile solutions, call management) and vendors (e.g. DealerSocket, VinSolutions, Elead1One, ImagicLab, Interactive360, DealerPeak, Higher Gear, Dealer.com, Promax, R&R Contact Management, CDK CRM, Autoloop XRM). Here is how you might want to start your new CRM year:
- Get familiar with the industry. We recently worked with the NADA University on a Guide to Automotive CRM. You can download it here under publication code CR8.
- Review your CRM contract. Most CRM contracts are short term. Renegotiate. There is a lot of competition in this sector.
- Analyze your monthly fees. How do they compare to what other dealers pay? This is a difficult thing to do as almost every dealer has a different configuration and pricing. Your 20 Group may be too small a sample to do this effectively. You can just send us your bill and we will do it for you for free based on our very extensive national database.
- Visit the Digital Dealer Conference in January 2016 in Orlando, and the NADA/ATD Expo 2016 in March in Las Vegas to check what’s all new in CRM. You need to stay ahead of the curve.
- Talk to your CRM vendor about data security and DMS integration. How does data get transferred? Are there any affiliates that receive the data? What safeguards does your CRM vendor have in place to protect your Non-public Private Information (NPI)? If you don’t know what to ask for, please contact us and we will provide you with a template.
Service Lane Tablets and Appointment Systems
Since new and used car sales don’t always offer the margins they used to, many dealers are relying even more on fixed operations. As the importance of Fixed Ops (esp. Service) increases, supporting dealership technology earns more attention. How to load your shop and increase the revenue per Repair Order (RO) are central questions. Many DMS vendors offer fully integrated solutions (e.g. CDK ServiceEdge Lane, R&R Service Portal and Service Sales Kit, Dealertrack Service Pro, Automate Mobile Service Consultant and Rev/Mate Appointment and Menu system). There are also strong third party applications available (e.g. Xtime Service Scheduling and Check-In, Autopoint Appointment and Walk Around, Dealer FX, kaarma,MOC1). Some of these vendors are endorsed by your OEM (e.g. Xtime by Honda and VW, MOC1 by Mercedes Benz, CDK by Ford with Ford Smart technology, BMW by Autopoint, TimeHighway by Acura, DealerFX by Chrysler with WiAdvisor). Here is what you have to do:
- Reach out to your OEM rep. What are they planning in this area? How compatible is this solution with your DMS?
- Talk to your 20 Group members and ADA peers. What do they use? Is it working? If you need a speaker for your next meeting to update you and present you with options through a free seminar or webinar, please tell your moderator and contact us.
- Talk to your CRM vendor rep and ask him how CRM and Service CRM incl. tablet solutions and appointment system tie together and integrate.
- Call us if you have questions or just need some help.
Network Equipment, Wireless Capabilities, and Security Applications
Due to the higher relevance of hosted software (e.g. SaaS CRM, ASP DMS), wireless applications (e.g. mobile tablets for service), and strict regulations about data safeguards (Gramm-Leach-Bliley), dealers need to review their risk exposure. Most OEMs provide guidance and services on network and managed security services. For example, GM Dealer Information Technologies provides security through Nuspire. Ford is running a Digital First Infrastructure program helping dealers modernize their network infrastructure and installing wireless Cisco Meraki equipment. Dealers might want to think about this:
- Review the STAR Dealership Infrastructure Guidelines with your team and compare to your current approach. How far are you away from the MUST and the Nice-to-Have solutions?
- Talk to your OEM rep and have them provide some feedback about OEM programs and recommendations.
- Reach out to your DMS representative and outside IT Service provider (like Helion Technologies) to demo and quote suitable solutions (e.g. firewalls, Unified Threat Management tools, Webfiltering systems).
- Have your IT team put together an IT policy covering security measures, monitoring procedures, training policies, and many more. Come up with a plan and budget to cover your bases.
- Contact all third parties that extract data from your DMS and have them execute a data security and confidentiality addendum. Contact us if you need support with reviewing the feedback from your vendors.
Phone System and BDC Features
The telephone is the first line in business communication for dealers – internally and with customers. That’s what over 380 dealers told us in our 2015 phone satisfaction study. Respondents indicated that the phone plays an even bigger role than personal meetings and email communication. No surprise GM initiated a General Motors BDC Implementation program to support dealers with setting up BDCs and improve telephony. In general, it appears one in six dealers is currently unhappy with their phone system. 60% of dealers said they wanted to replace phones to add more features, and update the equipment. Advanced telephone features, however, are rarely used, and most dealers don’t know which features to add when replacing the current phone system. Dealer should do the following:
- Get familiar with phone manufacturers and solutions. What vendors and features do dealer need? Downloading our 2015 Gillrie Dealer Phone System Satisfaction Survey for free is a good starting point.
- Talk to your DMS and CRM vendors about how you can merge DMS – CRM – Phones, and how these vendors can help you provide a unified customer experience across communication channels.
- Understand pricing and feature differences between DMS phone offerings and independent phone reseller products. Also, be aware of how your resellers set up your quotes and configuration. Are you comparing apples-to-apples or looking at an on-premise system and a hosted system?
- Be careful with phone brokers. Unlike independent consultant like us, they get paid by phone vendors. Do you think they will recommend the best solutions for the best price and terms?
- Call us for the professional help you need to make the right decision and get the best terms.